Saskatchewan Government Introduces Bill to Withhold Carbon Tax on Natural Gas

Saskatchewan Premier Scott Moe gestures while speaking at his party's convention in Regina, on Saturday, Nov. 4, 2023. THE CANADIAN PRESS/Heywood Yu

In a bold move, the Saskatchewan government has introduced a new bill in the legislature aimed at halting the remittance of the federal carbon tax on natural gas bills. This legislation, if passed, will offer legal protection to those involved with the province’s energy Crown corporation, SaskEnergy.

The Saskatchewan Party government, led by Premier Scott Moe, announced its decision to cease remitting the carbon tax on natural gas starting January 1. This decision is a direct response to the federal government’s recent pause on the carbon tax for home heating oil, a measure mainly benefiting residents of the Atlantic provinces. The move by Ottawa has been deemed unfair by Saskatchewan and other provinces, arguing that natural gas, a primary heating source in these regions, should receive similar treatment.

The new bill would designate the province as the sole registered distributor of natural gas in Saskatchewan, effectively placing the responsibility for any legal repercussions of not remitting the carbon tax on the government itself. “I think what we’ve tried to do is provide as much assurance as we can,” said Dustin Duncan, the minister responsible for SaskEnergy. Duncan has reportedly hired personal legal counsel over the issue, with the province expected to cover the legal costs.

Dustin Duncan speaks at the Legislative Building in Regina, Tuesday, Aug. 22, 2023.The Saskatchewan government has introduced legislation that it says would enable it to stop remitting the federal carbon tax on natural gas bills while providing legal protection for those at its energy Crown corporation. THE CANADIAN PRESS/Michael Bell The Canadian Press

The federal law mandates steep fines and potential jail time for executives of corporations that fail to remit the carbon tax. Duncan, showing his commitment to the cause, has previously stated his willingness to face “carbon jail” if necessary. The proposed bill aims to shield SaskEnergy, its current and former directors, officers, employees, and associates from these legal consequences.

Prime Minister Justin Trudeau, in late October, stated that Ottawa would not offer further exemptions, pointing out that heating oil is significantly more expensive than natural gas, and those relying on it have limited alternatives. Despite this stance, the Saskatchewan government argues that exempting SaskEnergy bills from the federal carbon tax could save the average family in the province approximately $400 next year. In the previous year, SaskEnergy remitted a substantial $172 million in carbon tax to the federal government.

Ottawa creates carve-out for the carbon tax on home heating oil

The province’s opposition, the NDP, is currently reviewing the bill before taking a position. However, the Saskatchewan legislature had previously shown unanimous support for the move in not remitting the tax to Ottawa.

As the bill progresses through the legislature, it sets the stage for a potential legal showdown between the provincial and federal governments. Donna Harpauer, the province’s deputy premier, has reportedly been in talks with Deputy Prime Minister Chrystia Freeland regarding the issue. The government remains hopeful for a change in the federal stance, despite indications to the contrary.